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tv   Nightly Business Report  PBS  February 5, 2015 6:30pm-7:01pm PST

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this is "nightly business report" with tyler mathisen and sue herera. massive data hack. 18 million customers and employees of the nation's second largest health insurer, anthem had their personal information stolen and on the black market that data is worth gold. crisis stage. why the next few days could be critical for america's west coast ports and the global economy that relies on moving all those goods. #bigbeats. revenues grew sharply but focused or something else. all that and more for "nightly business report," thursday february 5th. good evening and welcome back in the black, stocks are now positive for the year as the dow jones industrial average
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rose more than 200 points its fourth straight day of substantial gains. more on that in a moment. we begin tonight, meanwhile, with a massive data breach. anthem. the nation's second largest insurer, accessing information. the breach hit all of the businesses possibly touching individual policy holders, customers at large employers and medicaid managed care plans. shares of anthem formerly known as well point fell on the news. bertha coombs has more now on the breach who's at risk the information that was accessed and what makes this one different. >> reporter: anthem said it discovered the breach a week ago, quickly contained it and notified the fbi but the damage could be devastating for the insurer's past and current customers. in a letter to anthem members posted on a dedicated site
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joseph apologized. saying no medical data stolen personal information up to 80 million current and former anthem members and employees was compromised including birthdays social security numbers, street addresses, e-mail addresses and employment information. analysts say it's important that the company win back trust. >> clearly, it is a crisis. they have to manage this properly. they have to assure their customer base that they are taking this very seriously. >> reporter: anthem is the nation's largest blue cross operator with more than 37 million current members across 13 states accounting for the scale of the attack. the company will pay for credit monitoring for those exposed. much of that cost picked up by insurance, nearly half of health care firms boosted coverage and systems to meet cyber threats at a higher rate than other industries according to marcia mcclellan but it's a race with no end. >> we have to constantly evolve
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so there's a technological solution to some of these aspects. greater degrees of enkripgs two factor authentication for enhanced password protection and detonation software to try to fight off the spear fishing campaigns. >> reporter: anthem's data was not encrypted but a spokesperson said the hackers were able to compromise the administrator's credentials. at that point, enkripgs would not have thwarted the attack. bertha coombs "nightly business report," new york. >> a lot of value on the black market. eamon javers has b looking into that and joining us from washington. eamon, if that hack attack was done by cyber criminals, in general, what could this information be worth? >> reporter: health information is more valuable on the internet black market than even credit card information. i've been talking to cyber security experts today who say you can sell health records online on the black market between $25 and $250 each.
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that compares to credit card numbers that go on the black market between $1 and $5. a lot more and insent vises the hackers to go out and get just this kind of data. >> when you say health info what are you talking about here? are you talking about my cholesterol count or my medical history or the personal information that is attached to those files? >> reporter: it's all that personal information you use in a medical record that you file an insurance claim. a lot what's happening here tyler, is they file false insurance claims and that's where the profit comes in for the criminals. they're out there filing totally bogus claims or selling the information to foreigners who then come to the united states and get actual health care paid for by these phony cards or out there buying health equipment like oxygen generators and other things and then reselling those on the black market and getting insurance reimbursement for that all fraudulent. >> wow. what happens now? what's the next step eamon?
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>> reporter: one of the interesting questions here among the people who look at this black market for information is whether or not the massive amount of information from this hack that could become available on the black market is going to drive the price down following the old fashioned law of supply and demand in the black market. will those health records now be sold for a lot less than they were sold for before now so much more potentially coming to the black market? that could be unintended consequence for the people who actually did the hack if they try to sell it. >> eamon, thank you very much. eamon javers in washington. the bulls were out in force today. the benchmark index now positive for the year as oil prices rebounded. earnings, decent and phi sor entered into a $7 billion deal. we'll tell you about that in a moment. dow jones tacked on 211 points. finished at 18,884. nasdaq up 8 points and s&p higher by 21. as for oil, many traders expect the volatility to continue.
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today, prices rose about $2 to settle above $50 a barrel. brent also climbed. now more on that pfizer deal. the drug company said it will buy hospira that makes injectable drugs for $70 million. pfizer gained 3% and hosphira for $5 billion. meg tirrell has details. >> reporter: pfizer said purchase will immediately add to earnings and strengthen what it calls its global established products unit. >> the the u.s. largest maker of injectable drugs. which are primarily drugs in the hospital the majority of those are things like anti-inif he canfekct tants, an el jesices.
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>> reporter: also in biosimilars, generic versions of drugs from living cells. like for cancer and rheumatoid arthritis. pfizer said that's an area it plans to grow. the u.s. finalizes around their path to market. >> estimates off the size of our market for the next ten years vary all the way from $2 billion and $20 billion. it will depend primarily which drugs make it to the market and when and more interestly what will be the price of the drugs. >> reporter: pfizer analysts applauded the deal. the drug company dealing with generic competition, like lipitor and celebrex and said it's considering a split of its businesses within the next few years. analysts say this seal bolsters its unit of older products to better stand alone. the $17 billion is a lot, pfizer has cash to spend. ceo ian reed said the company looks for business development opportunities and the hospere
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will not be a distraction. pfizer has the appetite for a lot more. for "nightly business report," i'm meg tirrell. call it debt diplomacy, the finance minister of the new greek government met today with counterpart in germany in an effort to renegotiate the big bailout. but germany isn't budging. ed vesta reports from berlin. >> reporter: there was no agreement between greek and german finance minister at the meeting in berlin. while mr. shribler the minister insists the new greek government is working together with the european union and troyca and sticking to the terms of the bailout. the new greek finance minister insists his government is not going to accept the terms of the current bailout and also what
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they want is a bridge program until the end of may so they can have debt talks and think about broader reform program for their economy. the bottom line from the meeting here in berlin is that germany has not moved a centimeter and the pressure is ever so high for greece to really present viable program for their economy and also for their society. for "nightly business report," i'm annette in berlin. >> and now julia chatherly with the reaction. >> reporter: returned to athens with the defiant message that he's given the greek people their voice back. now changed the narrative in europe a way from austerity. for european leaders, that message was already filtering through in the past month, but there's one or two people behind me that agree with the message
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there. you can see what i think for the first time in all the times i've been here in athens and that is a show of support for the government here. there are peop blowing whistles waving greek flags, chanting their support of the government and the message they take in and across europe in the last two days. i have to admit, it worries me because it makes a comedown or a climbdown by this government very difficult to achieve. what we've already heard them say is we're not going to argue the debt right now. they've got the message as far as wages and pension raising. it's concerns but can they do enough to appease european leaders a get what they want? they're going to announce their program on saturday and have a confident vote in the government on monday. that is then what they will take to european leaders next week and that's going to be crunch time for greece and the future of this country because the clock is ticking to work out just what can be done for greece going forward. for "nightly business report," i'm julia chathly in athens.
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in denmark, that country's central bank cut its benchmark interest rates again. the fourth cut in less than three weeks. the move designed to protect its currency pay to the euro which has been stranded since the european central bank announced its stimulus program. still ahead, twitter's earnings were better than expected but there was one number that investors are focusi.
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more fallout from the big hack at sony pictures. amy pascal cochair of sony pictures entertainment and the executive oversaw is controversial film "the interview" will now step down. the cyber attack as you recall was one of the biggest in corporate history leaking thousands of e-mails, many of them embarrassing. pascal will leave her post in may. after the close of trading, twitter surprised investors with its fourth quarter results. the company earning 12 cents a share doubling wall street estimates. revenue was about $480 million easily topped consensus as well. shares surged initially in after hours trading. julia boorstin has the one big takeaway from twitter's results. >> reporter: twitter is making a lot more money even if it's not adding a lot more users. the company finishing the quarter with 288 million monthly active users up 20% from a year earlier but means it added 4 million users over the quarter,
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fewer than wall street expected. that means twitter is making a lot more money on its existing user base with the amount twitter makes for every timeline views growing 60% over the past year. bolsters ad business by giving tools to mobile users in particular. those mobile users now represent 80% of twitter's audience and 88% of its advertising revenue. for "nightly business report," i'm julia boorstin in los angeles. well as you know twitter has garnered a lot of attention since it went public both positive and negative and it's taken investors on a wild ride. november 2013. twitter officially becomes a public company. the social network that allows people to post messages in 140 characters or less priced at $26 a share in what was the most anticipated tech ipo since facebook. and soon after trading began, investors clam mored for a piece
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of the company. the stock surged closing its first day as a public outfit at $41.65 a gain of 60%. and by the end of the following month, december 2013 twitter reaches its all-time high of $74 $74.73 but then a proverbial tweet storm. demanders with more and more innovation and when they don't get it, they sell. shares stumble and today, the stock is about 44% below that all-time high. and that is nothing to tweet home about. >> linked in reports a huge jump in quarterly revenue and that's where we begin the market focus. saw sales rise as more use service to find job candidates and expansion in international markets like china also helped link post to beat. much higher shares initially but
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before up 2.5% to $237.97. a totally different story for pandora. the streaming music service reported revenue widely missed expectations as mobile advertising growth slowed. the bad news didn't stop there either. it gave revenue guidance for its current quarter that also trailed consensus. shares got slammed initially in after hours trading and before the close, shares were off just slightly to $18.41. strong holiday demand for its skin care and make-up products estee lauder posted better than expected results. the beauty company warn full year sales fall more than expected because of the stronger dollar but shrugged that off. $78.40. tough day for shares of dunkin donuts. a lot of people like the coffee and donut chain but profits trailed estimates and cut its full year outlook blaming consumer challenges and competition in the breakfast
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environment. the company did raise quarterly dividend to around 26 cents a share for yield of about 2% and all the sugar you can entail. shares fell to $46.03. shares for sprint in the meantime set its quarterly revenue fell less than expected. the wireless provider attracted more by cutting prices offering big promotions. shares up more than 5%, finished at $4.82. same time, verizon wheeling and dealing, selling to frontier communications $10 billion on that one. dow component also selling cell towers to american tower for $5 billion. going to use some of the proceeds to buy back about $5 billion of verizon stock. look at the shares moving higher initially after the bell. before the close, the stock was up a fraction to $47.86. and now to the economy. and the trade deficit which jumped in december to the highest level in more years. the commerce department reports the deficit rose 17% to more
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than $76 billion as exports fell and imports climbed to a record level. and economists expect the deficit to widen even further. trade deals have been a key focus in washington particularly because many there think an ambitious pacific trade pact could be an area where both parties come to get a deal done. raise gdp by half a percentage point. john harwood spoke with michael froe man and joins us now from washington. john? >> reporter: trade deals a h to get through congress. this one will be no exception. the majority of republicans don't like president obama. democrats don't like trade deals because they think they may be bad for labor and the environment but mike fro man said it will be good for wall street and workers alike. >> this is core to middle class economics in terms of creating jobs supporting jobs here improving wages and so i think there's an interest on both sides coming out of the election
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of november to find areas they can work together on in order to help strengthen the u.s. recovery. and i've heard from a lot of investors, a lot of companies that are looking to determine where they should put their next fact. with these trade graemts the u.s. will be at the center of a web of agreements giving unfettered access to two-thirds of the u.s. economy and that makes the u.s. an attractive place for investment. >> but if this goes through, it won't be because of big public demand for it tyler. in a recent nbc news wall street journal poll when respondents were asked to list the areas they want wall street to focus on trade agreements dead last. >> for the deal to go through, do these deals go through unscathed or do they get pecked at like a duck? >> reporter: well there are three elements that have to go through if it will get through unscathed. first of all, congress has to grant the president trade promotion authority to gives him the right to trade on the up and down vote with no amendments.
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that's one agreement and then the asian counterparts. big disagreements with japan with agriculture and autos and finally with the final deal they have to take it back to congress and pass both houses. usually easy in the senate but not so easy in the house of representatives. need about 180 republicans and about 40 democrats. >> so it sounds as though i know you said at the top of your report that it was going to be a tough sell but could you put odds on whether or not it will ? >> reporter: i think it's likely. this is difficult, but it's not impossible and since both sides don't have much they can agree on they've got a lot of incentive to do at least one thing and this is it. >> john thank you very much. john harwood in washington. much of the trade between the u.s. and asia goes through the west coast ports and all that economic activity could take a big hit if a deal isn't reached soon between dock workers and as we've been reporting, the slowdown has been going on for months now but as jane wells
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reports, a complete standstill could be just days away. >> reporter: it has gotten so bad at west coast ports, the company say some ships wait over a week for a parking space and ships that used to take four days to unload are now taking 15. the group representing shippers and contract negotiations with dock workers warn the system could collapse on itself in five to ten days. >> now the pma must decide how much longer we pay workers to work slowly. it's the same result as workers strike except workers still get a paycheck. >> reporter: in a rare move the pacific maritime association or pma has gone public with the contract it is offering dock workers after nine months of negotiations. the pma said the average dock workers on the west coast earns $147,000 a year and raises over the next five years will boost that pay to 160 grand. it has offered to continue fully funding all health care with no deductibles, premiums or copays
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and also raising pensions 11% and giving dock workers jurisdiction over the maintenance of trailers used by trucks for cargo at the ports. apparently this is not enough. >> concluded the latest offer is far as we can go at this point. >> reporter: the union said both sides are extremely close to a resolution and to shut the ports down now would be reckless and irresponsible. in the meantime, companies like honda and subaru are reportedly paying more to fly in auto parts and in the u.s. hog farmers say the bottleneck is hurting their exports to asia. jim mckin nen said in a conference call if it comes to the standstill they can have a period giving power to a mediator to bring about a contract. as the shutdown in 2002 proved it can take months maybe longer to recover and this time there is more competition coming with the widening of the panama canal. >> what's at risk here? the national economy, commerce place goes down we all got
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major, major problems. >> reporter: how major those problems are, we'll find out in about a week. for "nightly b jane wells, san pedro, california. still ahead, what will wall street and main street be watching for in tomorrow's big monthly employment >> well long rumored radio shack makes it official. the company has filed for chapter 11 bankruptcy protection. the retailer said it will sell
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up to 4200 stores to shareholder standard general and more than 1700 of the stores will be cobranded with sprint. a major oil field service company says it plans to lay off 5,000 employees or about 9% of its workforce. weatherford international cites the sharp downturn saying the move is expected to save the company $350 million annually. and the number of americans filing for unemployment benefits rose last week. initial jobless claims up 11,000 to 278,000 for the week that ended january 31st. and now attention turns to the government employment report for january. it's due out tomorrow. according to dow jones, economists expect non-foreign payrolls to increase 237,000 and the unemployment rate to come in at 5.5%. hampton pearson has more now on tomorrow's report and what it might mean for the federal reserve and the markets. >> reporter: while more people filed unemployment claims last week the overall number though
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seeking jobless benefits remains near historic lows at nearly 293,000, the four week average dropped 15% in the last year. economists say that decline means businesses are keeping their workers and potentially looking to hire. after one of the best years for job growth in more than a decade. >> last year was best year of job growth since '99. unemployment is 5, 6. three seats very solid. got a massive tax cut to u.s. households. by the way, had some of the best spending data last quarter. we've had about ten years. >> reporter: the trade deficit jumped more than 17% to just over $46 billion in december. that's a potential drag on the overall economic growth including the job market. as the strong dollar makes u.s. exports more expensive overseas. leading money managers keep a close watch on possible external
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shots to the u.s. economy. >> i think over the next six months we'll continue to see strong job growth but it's really about the international marketplace and it's any external shocks as far as financial products which will drive really what happens in the jobs market. >> reporter: what won't be in tomorrow's jobs report is the big spike in planned layoffs in the energy industry due to falling oil prices. in january, firms announce more than 21,000 planned layoffs in that industry according to a report from challenger gray in christmas. meanwhile, zed watchers and leading economists say if the job numbers come well blower the consensus, it's likely janet yellin and fellow monetary policy makers are more patient when it comes to raising interest rates. upside surprise however, if it also includes positive signs for wage growth increases the possibility for a rate hike this year. the improving job market is boosting consumer confidence but
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not worker's wages. tomorrow's job reports contains key annual revisions that should give us a clearer picture of what really happened with jobs and wages last year and a preview of what lies ahead. for "nightly business report," i'm hampton pearson in washington. and that does it for "nightly business report" for tonight. i'm sue herera. thanks for watching. >> and i'm tyler mathisen. thanks from me as well. have a great evening, everybody and we will see you back here on jobs friday, tomorrow ni
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just ahead: giving your youngster a leg up on a successful future! early childhood education may impact everything from unemployment to violence and teen pregnancy. we'll look at the efforts underway in two school districts. don't call it "vocational education," statewide "career tech" programs take a new direction in getting high school students ready for jobs and college. and a southern california teacher is "blinding them with science." chemistry takes center stage as this instructor receives top honors as "teacher of the year." not once... but multiple times. it's all coming up on inside california education. ♪ >>inside california education is made possible by: school services of california, capitol advisors group schools insurance authority kobayashi & company,


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